CMA CGM has confirmed it is taking over French peer La Meridionale and unveiled ambitious plans to revive the struggling Mediterranean ropax owner.
The company said in February it was in exclusive talks to buy the Marseilles-based passenger and freight operation from its owner, logistics company Stef.
In a statement late on Wednesday, CMA CGM announced having finalised the deal, without disclosing the price.
La Meridionale, which owns four ro-pax vessels shuttling between Marseilles, Corsica and Morocco, will become part of CMA CGM’s new “specialised shipping operations” department.
That new division includes other recent acquisitions of the sprawling French group, namely a 12% stake in separate French ropax owner Brittany Ferries, CMA CGM’s new car carrier business, as well as Neoline — a Nantes-based company developing the first sail-powered ro-ro vessel.
The motivation to buy La Meridionale and a stake in Brittany Ferries is not just entrepreneurial.
Flush with cash from the container ship boom during the Coronavirus pandemic, CMA CGM is investing billions to become a logistic conglomerate and is setting aside some of that cash to help struggling French peers who fared badly in the pandemic.
Led by Rodolphe Saade, himself a native of Marseilles, CMA CGM pledged to keep investing in La Meridionale.
Newbuilding order
As part of a modernisation of its fleet, CMA CGM said on Wednesday it intends to place an order for two new LNG-powered vessels for La Meridionale, which could also run on methanol.
“They will ... be able to carry out operations with zero CO2 emissions during port calls and are set to replace the oldest vessels on services between Corsica and Marseille,” CMA CGM said.
CMA CGM’s focus on LNG and methanol dual-fuel engines is in line with the company’s fuelling options for the latest generation of mega-size boxship orders it is contemplating.
The new ships would help provide the first “green corridors” in the Mediterranean and boost Corsica’s attractiveness as a tourism destination, the company said.
Modern, low-pollution ships would be a welcome addition to the Mediterranean Sea, where top environmental standards have been so far less of a priority with both regulators and consumers.
This has opened a window of opportunity for owners of older ro-ro vessels in northern Europe, where they are no longer deemed good enough, to find willing buyers and new employment in southern waters.
CMA CGM hopes that the new ships will provide customers, tourists and La Meridionale’s about 600 employees a travelling and working experience that has been so far largely lacking in the Mediterranean Sea.
Labour union consent was a key part of finalising the acquisition, alongside regulatory approvals.
CMA CGM pledged to provide additional training to La Meridionale’s predominantly local, French seafarers and to offer them career opportunities with its oceangoing fleet.
CMA CGM, king of all media
La Meridionale’s acquisition shows that slowing profit does little to dampen CMA CGM’s appetite for expansion.
The logistics giant reported earlier this week a 72% annual profit drop in the first quarter to $2bn.
The company has committed more than $30bn in the past two years to expand in everything from container ships to onshore logistics and technologies to media.
CMA CGM last year became a newspaper owner with the acquisition of regional La Provence in Marseilles and Corse Matin in Corsica.
This year, CMA CGM’s media kingdom is going national.
The company disclosed in April that it owned a 10.2% stake in French TV channel M6 and had become a shareholder in Brut, an online media platform.
On 25 May, CMA CGM unveiled its most ambitious media investment yet, announcing it has committed to acquire 100% of La Tribune — a major French former business daily newspaper that has gone fully digital by now.
“CMA CGM aims to be a decisive player in innovation and transformation in the media sector,” the company said.
